PPF is a popular investment scheme in India, which gives 7.1% interest. Depositing money by the 5th and investing the entire amount at the beginning of the year gives more interest.
New Delhi. Public Provident Fund or PPF is a popular investment scheme in India. People like to keep their savings in PPF account because of good interest, tax exemption and almost no risk of money sinking. Currently, interest is being given at the rate of 7.1 percent on the amount deposited in PPF account. Some people earn more interest than others by investing money in PPF account. They do not do anything new or extra. They just know the rules of PPF correctly and they take advantage of this and earn more interest from their money.
If you also keep correct information about the calculation of interest in the Provident Fund account and run your account accordingly, then you can also get more returns than others from the deposited amount. PPF account can be opened in post office or any bank branch. A minimum of Rs 500 and a maximum of Rs 1,50,000 can be deposited in PPF account every year.
5th date funda
According to PPF rules, interest is calculated on the amount deposited in the account between the last date of the month and the 5th. No interest is paid on the money deposited after the 5th and interest on that amount starts from the next month. Therefore, if you deposit the money by the 5th, you will get interest for the whole month. On the other hand, if you deposit the money after the 5th, you will not get interest for 25 days.
Full investment at the beginning of the year
PPF earns compound interest on money. This is the feature of compounding that makes money grow. To get more interest from the amount deposited in the PPF account, if you invest the whole year at the beginning of the financial year, then you will get more benefit than depositing money every month. To get more interest from the Public Provident Account, you should avoid withdrawing money from the PPF account frequently. Withdraw money only when it is very important to do so. Due to frequent withdrawals, the minimum balance criteria gets spoiled and the person is not able to earn the desired interest amount.
You can invest up to Rs 1.5 lakh annually in your PPF account. The interest rate and tax exemption of PPF is higher than many other government schemes. Therefore, to earn more money from interest, you should deposit Rs 1.5 lakh annually in your PPF account.
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